The Premium on Screen Is 3%, So Why Is My Fill Price Different?

You saw a kimchi premium of 3% and pressed the buy button, but when you work it out yourself from your trade history, it comes to the high 2% range, or even above 3%. It was clearly the number at the same moment, so why the difference? In most cases it is not an error but a difference that comes from different calculation bases.

The premium on screen is calculated from the representative price

The kimchi premium (kimp) shows, as a percentage, how much more the same coin costs on a Korean exchange than on an overseas exchange. The formula is (Korean price ÷ (overseas price × KRW/USD exchange rate) − 1) × 100. For example, if the Korean price is 1.03 times the overseas price converted into won, the kimchi premium is +3%.

The price used here is usually the representative price, that is, the most recently traded price. Overseas prices are in dollars, so the exchange rate is applied as well. Services differ in how often they update, which exchange they use as the base, and whether they use the won price of Tether (USDT) instead of the exchange rate, so the numbers can differ slightly.

In short, the kimchi premium on screen is a reference indicator that shows the temperature of the market as a whole. It is not a number that guarantees the price you will actually buy or sell at.

Order-book gaps and market orders create the difference

Quotes are the prices at which people have placed orders to buy or to sell. In the order book, sell orders are stacked upward, starting from the cheapest ask. A market order does not set a price; it fills immediately against the quotes that are there right now.

Say the representative price is ₩1,000 but the cheapest ask is ₩1,002. If you buy at market, your order fills from ₩1,002 at the lowest. You already start about 0.2% above the price on screen.

On top of this comes the question of quantity. If there is not enough quantity at that price, the rest fills at the next, more expensive quotes.

An example with ₩1 million

Suppose one coin has a representative price of ₩1,000 and the asks are stacked as below. The numbers are an example to make it easier to follow.

• ₩200,000 worth at ₩1,002
• ₩300,000 worth at ₩1,005
• ₩500,000 worth at ₩1,010

If you buy ₩1 million worth at market, all three quotes above are filled. Together they come to exactly ₩1,000,000.

The quantity is about 199.6 + 298.5 + 495.0 coins, about 993.1 coins in total. The average fill price is 1,000,000 ÷ 993.1, about ₩1,007.

That is about 0.7% above the representative price of ₩1,000. If the kimchi premium on screen was 3.0%, then by your average fill price you bought at a price closer to 3.7%. Precisely, (1.03 × 1.007 − 1) gives about 3.7%.

The difference between the price you expected when you ordered and the price you actually got is called slippage. Slippage tends to be larger for coins with little trading volume and at times when prices swing hard.

What to check before you order

1. Check which price the kimchi premium on screen is based on. Whether it is the last traded price or based on quotes is usually in the service's explanation.
2. Look at the gap between the cheapest ask in the order book and the representative price. If the gap is large, a market order works against you.
3. Work out how many levels of the order book your order will take. As in the example above, add up the quantities level by level.
4. A limit order instead of a market order is also worth considering. A limit order buys only at or below the price you set. The trade-off is that it may not be filled.
5. After the trade, check the average fill price in your trade history and add the fee separately. Fee rates differ by exchange and can change, so check the exchange's notices.

You can compare the kimchi premium trend of each coin in the kimchi premium ranking. Keep in mind, though, that this too is a reference indicator.

Things to watch out for

When the kimchi premium figure jumps sharply for a moment, the price is most likely moving fast. If you order in the meantime, the gap between the number you saw on screen and your fill price can grow even wider.

A high kimchi premium does not mean that the price will fall, or that it will rise. It is safer not to use it as grounds for deciding the direction.

Key takeaways

The kimchi premium on screen is calculated from the representative price, while your fill price is decided by the order book and the type of order. A market order fills by climbing up through the asks, so its average price can end up higher. Before you order, look at the order book and use a limit order if needed; after the trade, recalculate with your average fill price. That is the order we recommend.